Hot Marketing Trends

Andertoons Cartoon
Six Pointers for Creating Successful Marketing Partnerships

Estimated reading time: 4 minutes 17 seconds

Sometimes called “co-marketing,” a marketing partnership is an agreement between two organizations to work together, using resources of both companies, to market in a way that boosts brand visibility, reputation and/or sales for both. In some cases the two organizations are even competitors (“frenemies”). There’s a multitude of different types of partnerships, but the successful ones have one thing in common: both partners get something they want from it.

The advent of the internet made these types of partnerships very common, and they became more accessible to small and midsize companies. Companies use digital partnerships as a way of:

  • Increasing the number of website visitors
  • Quickly increasing prospective customer databases to get more sales leads
  • Economizing on marketing costs
  • Breaking into new product areas or geographic regions
  • Increasing the value each company offers its customers by offering them something additional from the other company via the partnership

Over the years, my former communications agencies’ staff and I developed numerous marketing partnerships for public relations purposes, to build visibility leading to more sales. Some of these have been cause marketing agreements, where a for-profit company partnered with a nonprofit organization. In cause marketing arrangements, the for-profit company contributes a specific amount to the non-profit, up to an agreed-upon limit, for each sale made. The non-profit benefits from receiving the donations. The for-profit positions itself as a good corporate citizen and receives additional visibility from the non-profit’s promotional efforts.

For example, we approached a major diabetes research organization on behalf of a small food company to help launch a no-sugar food product in a market outside the United States where the brand was relatively unknown. The company made a donation to the nonprofit for each sale of the product in grocery stores, up to a set limit. The non- profit not only benefited from these donations, it also used the publicity and promotion to raise its own visibility and to educate diabetics and those who care for them about a new food option. The food company benefited from allying itself with a well-known research organization, which gave its brand an aura of credibility in a market where its products were unknown.

This example shows that startups and small companies are not limited to partnering with other small companies. There have been many instances of small companies partnering successfully with large organizations.

Marketing partnerships are very prevalent among big tech companies to introduce and market new technologies. A good example is the partnership Best Buy and Samsung formed about five years ago. The agreement between the two companies was that Samsung would have its own branded store, the Samsung Experience Shop, within Best Buy. And Best Buy would have the exclusive right to host these shops.

According to an article in the  Star Tribune, Samsung had wanted to develop its own retail shops all over the United States, but company executives felt it would take too long and cost too much. Best Buy, which had an abundance of retail space, made an exclusive deal to be Samsung’s retail parter for the store-within-a-store concept. Best Buy benefited by associating its brand closely with one of the world’s hottest tech companies, and Samsung was able to establish a big presence in the U.S. almost immediately at a much lower cost than opening its own stores.

It worked because both sides won. Samsung wasn’t competing with Best Buy as a retailer and Best Buy wasn’t developing its own line of phones.

Here are six key pointers for successful co-marketing arrangements:

  • The contributions to the alliance from both partners should be well-balanced. If one side puts much more at stake than the other, there’s a danger of ill will resulting in a partnership break-up.
  • When one partner depends on the alliance for success a lot more than the other, an imbalance of power between the partners can easily result.
  • The marketing partnership should be co-managed, with both partners having equal say in the way the joint project is carried out
  • All of the above were summed up in an April 1993 paper in the American Marketing Association’s Journal of Marketing by Louis P. Bucklin, at that time a marketing professor at Berkeley’s Haas School of Business, and Sanjit Sengupta, then an assistant professor at the University of Maryland. “The less the conflict between firms in a co-marketing alliance, the greater the effectiveness of the relationship,” wrote the authors. They concluded that for this type of alliance to have a positive outcome, the stakes in the outcome should be equally important to both partners.
  • A marketing partnership will only work if both partners are targeting the same audience and have the same vision of what success should look like.
  • Communication about the partnership to the target audience is one of the biggest benefits for small companies partnering with large and well-known organizations. But poor communications between the partners has been the downfall of many partnerships. I’ve seen situations where the marketing staff at a startup didn’t check with the company’s marketing partner before communicating news about the partnership to the media. When marketing professionals make this kind of gaffe, it may be the last mistake they make at the company because it can easily be cause for firing.

By Lucy Siegel, Lucy Siegel LLC

 

 

 

 

Inflluencer Marketing Trend Is Hot
Payments to Celebrity Influencers Must Be Revealed

FTC Cracks Down on Unethical Marketing Tactics

Reading time: 5 minutes, 9 seconds

Anyone who has read about marketing in recent years is aware that both the amount of, and the influence of traditional advertising, both online and offline, have declined steadily over the last decade. In place of traditional ads, marketers are using numerous new tactics and technologies. One technique that’s hot right now is paying “influencers” to promote products on social media platforms. But unethical marketing tactics may eventually erode the power of paid influencers significantly. Outlined here is the basis for that conclusion.

Inflluencer Marketing is one of the hottest marketing tactics.

Influencer marketing is one of the hottest marketing tactics; influencers can make a real difference with social media audiences.

Social media first began to take hold in the late 1990s/early 2000s and quickly brought about a sea change in the methods marketers used to promote their companies and products. Social media has had a huge impact on the way people communicate with each other, including the increased importance of “word of mouth” in influencing opinions. At the same time, traditional print and broadcast media have lost ground, with continually declining subscription numbers leading to ever-shrinking ad revenues, which in turn have led to less robust reporting and content development infrastructure at all but a small number of the most powerful media.

Recent statistics are startlingly clear in demonstrating this. Last year, eMarketer projected that online ad spending would overtake TV ad spending this year. And no wonder, since the number of hours of TV watched per week by Americans under the age of 50 has been rapidly declining. (According to eMarketer, people 24 and under are watching two less hours of TV per week this year than last year, and 25- to 34-year-olds are watching an hour less per week, year-on-year. This isn’t a new trend; the number of hours of TV consumption has fallen precipitously over the last 5-10 years.)

Online advertising has its own problems. Large numbers of consumers have installed adblocker software to avoid constant advertising interruptions of their time online. According to HubSpot, the most popular adblocking software, Adblocker Plus, has been downloaded 300 million times worldwide, which isn’t too surprising, since 87 percent of people say there are more ads online now than two years ago. HubSpot says this cost publishers $22 billion in 2015 alone.

Most marketers are quite aware of the problems associated with advertising. There has been growing interest in harnessing the power of social media to build brand awareness and loyalty, and to promote products using promotion, public relations and some new forms of digital marketing. For example, the use of marketing analytics tools has been growing to draw more site visitors and increase sales leads using “owned content” (content created by marketers), search engine optimization and social media.

Another example: companies employ public relations staff or agencies to reach out to popular bloggers with free product samples as a lure to bloggers to post positive product reviews. The reviews are then shared by site visitors on social media with their peers. This works especially well when bloggers don’t tell site visitors they were given free product, of course, leaving the impression that their reviews represent unbiased opinions. It took a while, but in 2009 the Federal Trade Commission (FTC) flagged unethical marketing tactics such as this one and issued regulations  requiring that bloggers reveal free swag from marketers to their followers or risk being fined up to $11,000. This has had some effect, but because there’s no practical way to enforce the regulations widely, not as big an effect as the FTC might like to have.

Now, let’s get back to influencer targeting mentioned in the beginning of this post, one of the latest trends to influence opinion online.  Over the last few years marketers have become much more sophisticated at using data from sources like Facebook to single out social media participants who have the most influence with their target audiences.

In some cases, these are offline celebrities, such as popular musicians, actors and sports figures. Marketers paid them hefty fees to talk about product on social media. But there are also people without any particular claim to fame who have become experts at building online visibility – online celebrities – and have hundreds of thousands – sometimes millions – of followers and are therefore important influencers. Some of these online celebrities are bloggers who used to review products in exchange for freebees from marketers, but now earn their livings charging substantial fees for blogging about products.

Paying Online Influencers Works Because Consumers Are Unaware

According to FTC regulations, these payments to influencers, both celebrities and online influencers, must be revealed. However, payments are often hidden at the end of the endorsements, soft-pedalled or referred to using terms that are vague and not well-understood by most consumers to mean that monetary payments – paid advertising –were involved.

The FTC is cracking down on this. According to an August 2016 Bloomberg article, “This uptick in celebrities peddling brand messages on their personal accounts, light on explicit disclosure, has not gone unnoticed by the U.S. government. The Federal Trade Commission is planning to get tougher: Users need to be clear when they’re getting paid to promote something, and hashtags like #ad, #sp, #sponsored –common forms of identification– are not always enough.” The article notes that the FTC has said it will make advertisers responsible for following the rules to adequately disclose that these celebrity posts are actually ads, which “could make the posts seem less authentic, reducing their impact.”

Therein lies the key to the future of both paid influencer marketing and the power of online peer influence. When consumers catch on that a lot of celebrity endorsements they see on social media are just paid ads, which will eventually happen if the FTC gets its way, paid endorsements will lose their effectiveness and their usefulness to advertisers. And so will sharing of paid endorsements by peers.

This type of promotion works because it’s deceptive: when consumers are unaware of the payments, they believe that influencers’ comments about products represent genuine enthusiasm. Deceptive marketing may work in the short term, but in the long term it tarnishes the reputation of the marketer and is therefore bad marketing.

By Lucy Siegel, Lucy Siegel LLC